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  4. 24 October 2001

Pork Industry Expansion

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About this Item
SpeakersAmery Mr Richard; Slack-Smith Mr Ian; Black Mr Peter
BusinessMatter of Public Importance


    PORK INDUSTRY EXPANSION

Page: 17906
    Matter of Public Importance

    Mr AMERY (Mount Druitt—Minister for Agriculture, and Minister for Land and Water Conservation) [4.42 p.m.]: I ask the House to note as a matter of public importance the expansion of the New South Wales pork industry and, as a result, the generation of regional jobs. It is timely that we recognise in this House the success of our pork industry in recent times. The industry has had its ups and downs over a number of years. Some honourable members would have seen the future and preservation of the industry some years ago in terms of protection and the prevention of imports. Those measures are still important to this industry, but the success of the industry in recent times, particularly the operations of Bunge Meat Industries in Corowa since undergoing a change of ownership, warrants recognition.

    The Australian pork industry is undergoing a period of expansion on the back of favourable prices and strong export demand. In recent years that expansion could only be described as rapid. Australian pork exports have increased from $20 million in 1997 to more than $150 million in 1999-2000. Current export levels are about 4,000 tonnes per month. Export growth has been greatest in Singapore, with $94 million in exports and in Japan, with $36 million. Traditional suppliers of pork to these countries have experienced herd health breakdowns, for example, the Nipah virus in Malaysia and foot and mouth disease in Taiwan and Korea. This has presented Australian producers with real opportunities. Demand from export markets currently exceeds the capacity of our producers to supply, and this demand is expected to continue or even increase in the South-East Asian markets. All sectors of the domestic industry are expanding to meet this demand.

    An expanding export market such as this obviously presents great opportunities for Australian producers and brings with it an increasing demand for local labour and expertise. That means jobs for locals, particularly in rural areas. One of the most significant producers in the Australian pork industry is a company called Bunge Meat Industries in Corowa and other parts of New South Wales. Bunge is Australia's largest pork producer and processor, with farms in New South Wales at Corowa, Albury and Moulamein, as well as five other farms in Victoria.

    Bunge produces about 20 per cent of Australia's pork and contributes more than 30 per cent of Australia's total farmed pork exports, primarily into Japan, Singapore, Korea, Hong Kong, Taiwan and New Zealand. The good news is that Bunge has been expanding its operations and has further plans for expansion in south-western New South Wales. I am pleased to advise the House that the company plans to double its production. This is a welcome development that will boost employment and local economies in towns such as Finley, Berrigan, Urana and Temora. Districts such as Berrigan and Finley have already benefited from the expansion, while further developments at Temora and Urana are planned.

    I advise the House that earlier this week there was a handover day to Singaporean company QAF Ltd, which recently purchased the operation for $157 million. QAF Ltd operates supermarkets and cold store operations in Singapore and has sound reasons for investing in an Australian-based pork operation. Australian pork has significant advantages in the Singaporean market over its major export competitors—Denmark, the United States and Canada—in that Australian pork can be flown to Singapore chilled and not frozen. We have that advantage because of our location. This makes Australian pork more attractive because it is considered to have better eating qualities than pork from other exporters who must freeze their pork for export.

    Australian pork also has the advantage of being considered to be a healthy, disease-free meat, unlike product from some other pork-producing countries. For this reason, Australian pork fills a niche at the top 1 per cent of the Japanese market. Australian pork makes up only a small proportion of pork on Japanese plates, but those plates are in the upper end of the market with the greatest value. Singapore is also securing a major supply source for its own market since its Malaysian suppliers have suffered huge setbacks through disease outbreaks.

    We do not know whether the Malaysian pork industry will be revived. What is certain is that export opportunities will remain for some time in the pork industry and this obviously means Australian jobs. The handover to QAF Ltd is good news for the industry, and all Corowa-based Bunge management will be retained. Indeed, with the expansion plans progressing, the handover will mean more jobs. New South Wales Agriculture staff, in conjunction with local councils, have taken a role in the planning process of Bunge developments to ensure that local communities get factual and impartial information about them.

    A key element of the proposals is the use of a network of contract growers who raise pigs in a housing system known as eco-shelters. This system uses a deep litter flooring of rice hulls or cereal straw as bedding. Eco-shelters are an environmentally friendly housing system with a greatly reduced odour emission compared with traditional pig sheds. The litter from the eco-sheds is also used as a fertiliser that provides nitrogen and phosphorous as well as valuable organic matter. Bunge's contract growers build a number of eco-shelters and provide the litter material and labour, while Bunge supplies the pigs and the feed. Most of these pigs are headed for valuable export markets in Japan or Singapore, earning producers and the country valuable export dollars.

    Bunge Meat Industries is a vertically integrated pork processing company that operates feed mills, farms, an abattoir and a boning room. The company's facilities in Corowa in southern New South Wales employ about 575 people. Although Bunge currently produces about one million pigs per year with an export value of about $50 million, it has plans to boost its production to two million pigs and forecasts exports worth $75 million in 2002. The company's network of growers will need to expand to accommodate growth, with more employment and income for producers. These contract growers raise pigs from 20 kilograms to 120 kilograms live weight. The company has contract growers in Rennie, Berrigan and Finley. It has plans for more than $10 million worth of grow-out developments in Temora, Urana and other sites in south-western New South Wales. These developments will provide investment and employment for regional economies.

    There is considerable potential for New South Wales to capture and increase its share of the expanding pork market. This market has high flow-on benefits to regional economies. It is well suited to further processing and value adding. There are also good opportunities for the expansion of the industry in central-western New South Wales. A number of co-operatives and producer groups in the Forbes, Young and Grenfell regions want to increase pig numbers and supply pigs to the newly renovated and export-licensed abattoir at Young. These really are great opportunities. I congratulate Bunge on capitalising on favourable world pork industry conditions, and providing significant employment benefits to regional communities. I encourage the expansion of the New South Wales pork industry in a sustainable manner, and I encourage the industry to continue to invest in best practice management techniques.

    I have outlined a great turnaround in an industry that, some years ago, considered it had a very uncertain future based on possible access to the Asian market and competition from imported product from various countries around the world as a consequence of various trade liberalisation rules. The pork industry has chased, and achieved, success in the Asian market. Last year, at the invitation of Charles Harvey, the then Chairman of the New South Wales Pork Council, I visited a property called Lansdowne East near Young, where I, and people like Ian Pollard from the industry, Sally Walker and others had the opportunity to see its operation. Not long after that, at the invitation of Bunge Meats, I had a tour of that operation. Based on issues they raised at the time and the great potential of the industry, their anticipation of success was not unfounded. I congratulate the industry on what it is doing for regional jobs in this State.

    Mr SLACK-SMITH (Barwon) [4.52 p.m.]: The pork industry in New South Wales is very important because pork is the world's most consumed meat. However, Australia produces only 0.4 per cent of the world's pig meat. The annual per capita consumption of pork has risen from 13.3 kilograms in 1979 to 17.3 kilograms in 1997. Ham and bacon account for about 50 per cent of consumption in New South Wales. Total farmed pig meat export figures for April dropped slightly below 4,000 tonnes, but 55 per cent of those exports were directed to Singapore, 16 per cent were directed to Japan, 8 per cent were directed to New Zealand, 5 per cent were directed to the Philippines, and 3 per cent were directed to Hong Kong and Korea.

    Those exports are the result of the hard work of Mark Vaile, the Federal Minister for Trade. Foot and mouth disease and Nipan virus in Singapore and Taiwan stopped the export of pigs from Malaysia and Singapore, which has banned pigs altogether. It was their bad luck and our good luck that we were ready to jump in and fill that void. As the Minister said, in Forbes, Albury and Wagga Wagga on the south coast, and in the Tweed the industry generates more than $200 million per year for New South Wales. Most piggeries in New South Wales are family owned.

    In 1980 New South Wales had more than 19,000 pig producers, but by 1996 that number was reduced to 3,500. The pig industry in New South Wales has undergone a huge change, but there is room for expansion. Yesterday the Minister and the Premier were talking about jobs for rural New South Wales and the great job those in the pig industry are doing. But that is no thanks to either the Minister or the Government. The Minister seems to take all the credit for it, but he has done nothing for the pig industry. By comparison, Warren Truss has contributed $24 million to the industry to help get it back on its feet.

    At Booying in the electorate of the honourable member for Lismore a company called Casino RSM Processors, which started work five years ago, is now killing 4,800 pigs a week. The company's export number for Singapore is 7,170. Singapore is the preferred export market, so the company is supplying an excellent product that is eagerly sought. It is a product on which Singaporeans place the highest emphasis. The company has spent more than $5 million to get the plant up and running. Apart from a small contribution for CO2 stunning funding and a small contribution to a power extension, which really amounts to very little, the State Government has done absolutely nothing for this company. The company wants to expand, to continue to export and to do something for New South Wales.

    Let us consider what is impeding the development of the company in New South Wales. The Minister knows, although he is doing nothing about it, that workers compensation premiums in New South Wales are far more expensive than they are in Queensland. The company is restricted by the weight it can place on its trucks. B-doubles are not accepted here like they are Queensland, and that creates a huge freight differential. Then, of course, there is good old payroll tax. The company is held back when one considers the opportunities available in Queensland and Victoria. Queensland has formed a Meat Industry Task Force to assist slaughterhouses, packing houses and abattoirs to expand. What do we have here? Absolutely nothing! This company has had to do it on its own without any assistance from the State Government. We are overrun by the States that try to help their businesses, particularly their export industries.

    It is all very well for the Minister to say he is doing a fantastic job, but the only people who are doing a great job are those in the industry. The Minister has given them no assistance whatsoever. When the Minister starts taking credit for doing a great job, he is really taking credit for the hard work of the people in the industry who are out there doing something. The Minister should get behind them and give them a go. This is just like the identification scheme all over again. In two years, before the next election, the Minister might decide to do something. Hopefully, he and I will change sides after the election. Processors in the pork industry have a goal; they have something to look forward to.

    The Council of Pork Exporters hopes to have more than doubled Australia's pork exports to 72,000 tonnes by 2002. I think that is a great goal and something the Minister should get behind. He should give the Council of Pork Exporters all the help he can. The Minister should bear in mind the jobs that will be created, and the money that will flow into the local towns and communities. We have a wonderful product and it is obvious that a number of countries who are our customers seek it out because it is of such high quality. I believe we should be supporting the industry for all we are worth. As honourable members know, pork exports have increased dramatically in the past few years, from approximately 33,000 tonnes in 1999, which represented 9.2 per cent of production. We have a very efficient industry that produces lean pork.

    I sympathise with the producers I knew quite well who exited the industry when things were very bad. The industry now is very efficient, but I believe it still has a long way to go. We have an ideal beginning. This represents an opportunity to assist the New South Wales pork industry, to make sure that we are not left behind in any research. We should do everything possible to assist this industry to keep rolling along. Pork producers have the drive, determination and energy to make the best of this opportunity. We on this side of the House believe we should be trying to kick as many goals as we can, instead of standing back and taking all the credit for the jobs, the expansion, the export earnings and everything else. Instead of taking all the credit, the Government should instead contribute a little. That would ensure the future of the New South Wales pork industry.

    Mr Amery: We are investing millions of dollars in the industry.

    Mr SLACK-SMITH: Yes, Minister, we are investing millions: private enterprise, not the Government, is investing millions of dollars in the industry. The problem is that we want more of it. What will happen, of course, is that the industry will look to either Victoria or Queensland because it is financially more advantageous to do so. If the New South Wales Government gets behind the pork industry and gives it a bit of a hand, New South Wales will reap the benefits. If the Government does not do that, the industry will stagger along at the same pace.

    Mr BLACK (Murray-Darling) [5.02 p.m.]: Let me inform the House for the second time this afternoon how pleased I am to support one of my city Labor colleagues on this matter. I refer, of course, to the Minister for Agriculture. My remarks principally concern a town called Moulamein in the south-east of my electorate. In fact, if it were not for Victoria it would be just about on the seashore! It is the oldest town in the south-western Riverina and it celebrated its sesquicentenary in July of this year. It was founded in 1851 and gazetted as a town one week after Victoria was gazetted as a State.

    Moulamein has been going through some hard times. It has lost its one and only bank and seven of its businesses have closed. It is famous now, of course, for a victory that the Minister celebrated down there. It was supposed to be a three-game match, the triples championship in that part of the country. The Minister, carried by local government—respectively the mayors of Balranald and Hay, David Shannon and Alan Purtill—beat the Hay champions, had a draw at Wakool and finally, a few months ago, won at Moulamein.

    Balpool Station, located on the Edwards River, is one of the great old stations in the district. It is the reason for the town of Moulamein being there in the first place, being located on the junction of two major streams, the Edwards River and The Billabong. Balpool has had a large intensive piggery for the past three decades, and in the late 1980s Bunge Meat Industries [BMI], Australia's largest pork-producing company, purchased Balpool. I was listening to some of the comments made by honourable members opposite who contributed to the debate. I recall going to Griffith as a candidate during the 1987 Federal election campaign. At that time things were the other way around and Griffith council was very much to the fore in informing me that the council was most concerned about flying pigs: those coming into the country from Canada and Denmark.

    In 1997 pork exports were worth $20 million to New South Wales. In the financial year 1999-2000 they were worth $150,000 million. That represents a huge expansion in the export industry. Bunge Meat Industries developed Balpool in the mid-1990s to run the existing farrow-to-finish piggery, a large grow-out facility using eco-shelter housing and a feed mill. Today is the handover day to the company to which the Minister referred, the Singaporean company QAF Ltd, which has bought the entire operation for $157 million. The Balpool piggery complex currently employs approximately 30 staff. It is arguably the township of Moulamein's major industry. There is extensive rice-growing in the district and other elements of the pastoral industry, but Balpool would be the most consistent employer because it is ongoing and does not have seasonal highs and lows.

    Most of the 30 staff I referred to reside in Moulamein, a township of 500 people, and the Bunge piggeries provide significant benefits for the local community. During the development process several significant Aboriginal cultural sites were located and identified, and the original plans were altered to protect these sites. The Balpool grow-out facility currently grows out weaners sourced from a BMI piggy at Bungowannah, near Albury. All pigs in the grow-out facility are housed in eco-sheds. These sheds use a deep litter flooring system of rice hulls sourced from the local rice mills. The used rice hulls and pig manure are composted into a valuable fertiliser that is sought after by local farmers. Weaner pigs are trucked to Balpool and housed in a new cleaned eco-shelter with new rice hulls.

    Pigs are kept in age-segregated batches using a production system called "all in-all out". This system of production improves animal health and overall production. At the end of the batch, finisher pigs are transported to the BMI abattoir at Corowa for processing. Many of the Balpool production pigs go to valuable export markets. Bunge currently exports over 30 per cent of Australia's total farmed pork exports to nations such as Singapore, Japan, Hong Kong and New Zealand. Bunge is currently seeking to expand its grow-out sites using a number of contract growers. The bottom line is that these operations will provide significant benefits to rural communities, such as the great community of Moulamein. [Time expired.]

    Mr AMERY (Mount Druitt—Minister for Agriculture, and Minister for Land and Water Conservation) [5.07 p.m.]: In the five minutes allocated to me to respond to the debate I will attempt to be fairly succinct and endeavour to cover the issues raised during the course of the debate. I thank the honourable member for Barwon, the shadow Minister for Agriculture, and my colleague the honourable member for Murray-Darling for their contributions. The honourable member for Murray-Darling welcomed the creation of jobs and new investment to his electorate, demonstrating to the House once again his awareness of his own patch, which comprises 45 per cent of the land mass of New South Wales. I congratulate the honourable member on being so involved in attracting investment to the electorate of Murray-Darling.

    I will briefly respond to some of the comments of the honourable member for Barwon. I would suggest to the honourable member that he certainly did not respond to the speech I made today. I do not know where he got some of his supposed facts from. He suggested I was attempting to take credit for the expansion of the pork industry and to take credit for the expansion of Bunge Meat Industries. That was certainly not in my speech. No doubt that misrepresentation will be read by the pork industry, which I know follows the Hansard of this House very closely. The honourable member tried to give credit for the expansion to Mark Vaile, and I think by interjection the honourable member for Lismore mentioned John Anderson.

    But the recovery over the last couple of years has been industry led. It has found the markets and capitalised on the misfortune—perhaps that is not a positive thing to say—of some of our trading partners. The industry is doing extremely well. I refute that somehow the State Government is taking credit for the expansion, although we have been working very closely with the industry through New South Wales Agriculture and through the planning process. For example, when Bunge's wanted to expand into new operations it had to look at how to manage its natural resources and so on. Our Government will be assisting the company and working with it as best we can to facilitate that change.

    The honourable member also referred to workers compensation. Back in 2000 I visited a pig farm near Young and Bunge's Meat Industries. I met industry officials and board members of Bunge's. One of the issues they raised was the high cost of workers compensation in this State. To quickly put to bed the Opposition argument on that point, I remind Opposition members that during the very fiery debate in the Parliament and in the community about workers compensation reforms the industry and the meat processing sector in New South Wales lobbied the National Party to support the legislation. It sent faxes. The honourable member for Lismore knows that he was lobbied by the pork industry and abattoirs. They asked the National Party to vote for the legislation. When the bill got to the Legislative Council the Opposition voted against it. Today the Opposition has claimed that the pork industry is concerned about high workers compensation premiums, but the Opposition voted against the reforms.

    Mr George: Point of order: My point of order relates to relevance. The Minister has to acknowledge that workers compensation premiums in Queensland are cheaper than those in New South Wales, and that is against the industry.

    Madam ACTING-SPEAKER (Ms Beamer): Order! There is no point of order.

    Mr AMERY: I refer to Hansard of the debate in the upper House. Members who voted against the legislation are recorded in Hansard and National Party members are on record as doing that. I also remind the House of an initiative of the New South Wales Government in partnership with industry, the New South Wales meat processing industry restructuring program. Details are in the kit handed out on Monday this week to the meat processors and abattoirs conference at Brighton-le-Sands. I table that for the information of honourable members.

    In conclusion, I thank honourable members for their contributions. In no way is the Government taking credit for the improvement in the industry, although on another day I would not mind highlighting our role in working with the processing sector. I have tabled correspondence showing that the State Government is working with the processing sector industry and the substantial amount of money involved with that. I congratulate the pork industry on turning around the industry in recent years with its outstanding export success.

    Discussion concluded.

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